QUESTION OF THE MONTH Please give us a New Year’s prediction (or two) for the outlook for the student housing industry in 2024. And your New Year’s resolution! My two 2024 predictions for student housing are sugar and spice. My sugar prediction is that the sector will con-tinue to enjoy strong leasing and year-over-year rental rate growth for the 2024-2025 lease up. Along with that, I predict that we will have a good start for the 2025-2026 lease up starting next fall. My spice prediction is interest rates and negative investor sentiment for development deals will continue to be headwinds for new develop-Clark ment projects. My New Year’s resolution is to super charge both my fitness routine and golf practice with a goal to reduce my handicap by 1-2 strokes. —Bob Clark, CEO, PeakMade Real Estate Co. Candidly, it’s tough to predict much of anything in this climate, but here’s something we’re extremely confident about looking toward 2024. Student housing will con-tinue to outperform the broader commercial real estate market. Even in a turbulent environment, we’re still see-ing significant capital interest in student housing and a steady stream of transactions lining up for the beginning of the new year. The industry’s strong fundamentals are not showing any signs of relenting and more capital sources — debt and equity — are taking note. —Timothy Bradley, Founder of TSB Capital Advisors and Principal of TSB Realty At Core, we see the strong possibility of a material bounce in transaction volume during 2024 after a tepid 2023. Continued strength of operating fundamentals, stemming from new supply running at less than half of levels witnessed in peak years a decade ago, along with consistent enrollment growth at Tier 1 institutions, is catching attention from investors of all types and sizes. For a 2024 resolution, I am hoping to become a regular again in my “old man” weekly basketball game after an 18-month hiatus! —David Rose, Managing Director, Core Spaces Rose Bradley Gronlie As we step into 2024, we anticipate new entrants to the sector to take advantage of the wide and growing spread between student and conventional multifamily cap rates. Student housing’s sustained rental rate growth has pushed this spread to its widest level in over 15 years, reversing what had been a decades long convergence. My resolution is to carry the flag for Harrison Street on the ‘Power Panel’ at this years Interface Student Housing conference! C’mon, SHB , let’s make it happen! —Justin Gronlie, Head of Education Transactions –North America, Harrison Street Baker Since I’m the debt guy here, I’ll predict that: due to con-tinued inflation moderation, the Fed will finally lower rates in Q3 of 2024. This, along with continued (very) strong rent growth, a stable treasury environment and a huge wall of student housing loan maturities will result Q4 2024 being the busiest quarter of student housing loan volume in the past five years. Resolutions? Well, consid -ering I have the knees & back of a 75 yr old, my resolu-tion would be to stretch every day (so I don’t re-injure the back playing pickleball and tennis!) —Will Baker, Senior Managing Director of Real Estate Finance, Walker & Dunlop Strong pre-leasing activity and continued rent growth at top universities nationwide means student housing will remain resilient in 2024. Student housing is one of the few property types that is expected to outperform for the next several years. Although capital availability will be constrained in 2024 for all real estate property types, the student space will receive an outsized share given its resilience. Even with student housing receiving an out-Templin sized share of capital, there will be reduced transaction volume in 2024, with capital selectively choosing which groups to partner with to access the sector. My New Year’s resolution is to land a wakesurfing 360. —Walt Templin, Head of Investment Management, Landmark Properties 1. Rent growth will be at least 6 percent for the 2024-2025 academic year. 2. Most companies are racing to leverage AI as a way to centralize services and decrease expenses. Even though I don’t expect AI to reduce expenses in the near term, I do think that it will add to the resident expe-rience. Said another way, we are too early in the game to generate real savings from AI. Speaking of being early, I am way too early for 2024 predictions! —Brian Dinerstein, Chief Executive Officer, The Dinerstein Cos. StudentHousingBusiness.com Feinour 1. Transaction volume will recover as rates stabilize and the lending environment improves, causing the volun-tary seller to test the market in the second half of the year. 2. Consolidation will occur among the top owners, developers and managers of student housing. My New Year’s resolution is to turn my electronics off more often and completely unplug from work! —Andrew Feinour, President and CEO, Student Quarters Dinerstein 32 November/December 2023
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